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Reprint of: Rank-and-file employee stock options and audit pricing: Evidence from S&P 1500 firms

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  • Chen, Xiaoqi
  • Li, Maoliang
  • Obiri-Yeboah, Emmanuel
  • Wu, Qiang

Abstract

In this study, we examine the impact of rank-and-file employee stock options on audit fees. We document compelling evidence that option grants to rank-and-file employees are positively related to audit fees. Further analyses show that this positive relation is more pronounced when a firm's real earnings manipulation risk is higher and when rank-and-file employees are more sensitive to monetary incentives. We also find that options granted to rank-and-file employees are positively related to audit efforts. The evidence suggests that auditors perceive options to rank-and-file employees to be associated with increased audit risk.

Suggested Citation

  • Chen, Xiaoqi & Li, Maoliang & Obiri-Yeboah, Emmanuel & Wu, Qiang, 2025. "Reprint of: Rank-and-file employee stock options and audit pricing: Evidence from S&P 1500 firms," The British Accounting Review, Elsevier, vol. 57(1).
    • Handle: RePEc:eee:bracre:v:57:y:2025:i:1:s089083892500006x
    DOI: 10.1016/j.bar.2025.101556
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